Increases in Financial Resources from Governmental Purposes Can Include Proceeds

question 17

Multiple Choice

Increases in financial resources from governmental purposes can include proceeds from bond issues and :

• A)​Sale of fixed assets
• B)​Sale from goods
• C)​Sale of services
• D)​All of above

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Definitions:

Combined Leverage

Refers to the use of both operating and financial leverage by a company to assess the potential impact on earnings due to changes in sales.

Degree of Financial Leverage

A measure that quantifies the sensitivity of a company's earnings per share to fluctuations in its operating income due to the use of fixed cost financing.

Earnings per Share

A company's net profit divided by the number of its common shares outstanding, indicating the company's profitability on a per-share basis.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.